We expect diversified utility company
Teco Energy Inc.
) to beat expectations when it reports fourth-quarter 2012
results on Feb 5, 2013.
Why a Likely Positive Surprise?
Our proven model shows that Teco Energy is likely to outpace
earnings because it has the right combination of two key
ingredients, namely, a positive earnings Expected Surprise
Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #3.
Positive Zacks ESP
: ESP which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at +14.29%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for the shares.
Zacks #3 Rank (Hold)
: We note that stocks with Zacks Ranks of #1, 2 and 3 have a
significantly higher chance of beating earnings. The Sell rated
stocks (#4 and 5) should never be considered going into an
The combination of Teco Energy's Zacks Rank #3 (Hold) and
+14.29% ESP makes us confident of an earnings beat on Feb 5.
What is Driving the Better-Than-Expected
Teco Energy's expansion of the customer footprint in Florida
and ramp-up in residential construction activity are expected to
lend significant upside to the company's retail sales. This will
be supported by a steady improvement in the Florida economy. The
proceeds from the divestiture of the Guatemala operations will
enable the company to reduce its outstanding debt.
The positive trend was also seen in the 13.51% earnings
surprise in the last reported quarter. This was on the back of
disciplined cost-control efforts and higher sales from Tampa
Electric and Peoples Gas businesses.
Other Stocks to Consider
Teco Energy is not the only company looking up this earnings
season. We also see likely earnings beat coming from other
Clean Energy Fuels Corp.
), earnings ESP of +87.50% and Zacks Rank #2 (Buy).
), earnings ESP of +200.0% and Zacks Rank #2 (Buy).
), earnings ESP of +17.19% and Zacks Rank #3 (Hold).
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TECO ENERGY (TE): Free Stock Analysis Report
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